Paragon's pace to slow by half

Buy-to-let mortgage specialist Paragon expects to do just half the business in the first six months of this financial year that it did in the same period in 2007, after the credit crunch dried up its funding from the money markets.

The group, which saw its shares collapse at the end of last year, after it was forced into an emergency £287m rights issue to shore up its balance sheet, said it will have cut its workforce by 30% in the last six months as it trims back on new lending.

But it added that it still believes that the buy-to-let market remains strong, with bad debts still at very low levels and demand for rented accommodation particularly strong as the housing market has generally weakened.

Paragon said its operating profit for the first half would be 'marginally lower' than the same half last year but that it will take a hit of £10m of exceptional costs relating to the rights issue and redundancies.